What must a trustee avoid to fulfill their duty of loyalty?

A trustee's duty of loyalty is a fundamental principle in trust law, requiring the trustee to act in the best interests of the beneficiaries without allowing personal interests to interfere. To fulfill this duty, it is critical for a trustee to avoid conflicts of interest. When a trustee has a conflict of interest, they may be tempted to make decisions that benefit themselves rather than the beneficiaries. This could undermine the beneficiaries' trust and the integrity of the trust itself.

A trustee is expected to make decisions impartially and solely based on what is best for the beneficiaries. Avoiding conflicts of interest ensures that the trustee's actions are transparent, fair, and aligned with the goals of the trust. This fosters trust among beneficiaries and maintains the legal and ethical standards expected of a trustee. In contrast, open communication with beneficiaries, minimizing expenses, and being involved in asset management are all important aspects of responsible trust administration, provided they are handled appropriately and do not lead to conflicts of interest.